Lithium battery material manufacturer Zhenhua New Materials officially landed on the Science and Technology Innovation Board after a 314.6% increase in its listing

 On September 14, Zhenhua New Materials was officially listed on the Shanghai Stock Exchange Science and Technology Innovation Board. The company's stock code is 688707 and the issue price is 11.75 yuan per share. As of the morning closing, Zhenhua New Materials' stock price was 48.71 yuan per share, an increase of 314.6%, and the total market value reached 21.58 billion yuan.

It is understood that Zhenhua New Materials was established in April 2004. Its controlling shareholder is China Zhenhua Electronics Group Co., Ltd. It is the only company under China Electronics Information Industry Group Co., Ltd. (CEC) that specializes in the research and development, production and sales of lithium-ion battery materials. Its main products are lithium cobalt oxide, composite ternary, power ternary and high manganese polycrystalline series materials. It has currently built a production line with an annual output of 30,000 tons of positive electrode materials, and its production capacity ranks among the top domestic peers.

Judging from the financial statements, ternary cathode materials are the main contributor to the performance of Zhenhua New Materials' main business. The prospectus shows that in 2017, 2018, 2019 and January-September 2020, it achieved operating income of 1.347 billion yuan, 2.655 billion yuan, 2.428 billion yuan and 684 million yuan respectively.

Among them, the main business is more prominent. In 2017, 2018, 2019 and January-September 2020, the main business income accounted for 99.01%, 99.9997%, 99.99% and 99.98% of the operating income respectively; other business income accounted for a small proportion, mainly raw material sales income, etc.

Among the main businesses, ternary cathode materials are the best. In 2017, 2018, 2019 and January-September 2020, Zhenhua New Materials' operating income from ternary cathode materials was RMB 1.195 billion, RMB 2.534 billion, RMB 2.363 billion and RMB 599 million, respectively, accounting for 89.6%, 95.44%, 97.29% and 87.66% of the main business income, respectively.

The main reason for the above situation is that its largest customer, CATL, mainly purchases ternary cathode materials. At the same time, since 2018, Zhenhua New Materials' performance has achieved a significant leap, which is mainly due to the increase in purchases from its major customer CATL; and since 2020, its sales of ternary cathode materials have dropped sharply, which is also due to the decrease in sales of its major customer CATL.